Amendments to DICGC Act gives relief to depositors in stressed banks

The Union Cabinet on Wednesday cleared the Deposit Insurance and Credit Guarantee Corporation Bill 2021 under which depositors of banks under moratorium will be able to access the insurance money of up to Rs 5 lakh within 90 days, All commercial banks and even branches of foreign banks operating in India will come under the purview of this legislation and this will be applicable to banks which are at present under moratorium. Addressing the press in New Delhi, finance minister Nirmala Sitharaman said that the proposed amendments will be a big relief to depositors of banks which have either collapsed or faced financial frauds.

 Sitharaman said that 98.3 per cent of bank accounts would be fully protected within the law. The Act will provide a solution to the biggest issue of customers having zero access to their funds for a long period till the RBI lifts the curbs on such banks. The DICGC is a subsidiary of the Reserve Bank of India and provides insurance cover on bank deposits. The DICGC (Deposit Insurance and Credit Guarantee Corporation) Act is aimed at minimising troubles faced by depositors of stressed banks like the Punjab and Maharashtra Co-operative (PMC) Bank or Yes Bank and Lakshmi Vilas Bank. This is the second step by the government since the last Union budget to protect bank depositors.